Charitable giving dips in the wake of tax law changes
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Charitable giving dips in the wake of tax law changes
Recent changes to tax law may be affecting charitable giving. Giving USA says charitable giving by individuals declined a little more than 1% in 2018, the first year those changes went into effect.
The new tax law doubled the standardized deduction to $12,000 for an individual taxpayer. The Urban-Brookings Tax Policy Center says only about 10% of households with higher incomes now have an incentive to donate.
Daniel Shaviro, professor of tax law at NYU, said he doubts the tax change will make much difference in the long run. That’s because taxpayers have to use itemized deductions to get the tax benefit.
“A lot of the people in the bottom 90%, many of them weren’t itemizing and so weren’t getting charitable deductions before,” he said.
But Howard Gleckman, a senior fellow at the Tax Policy Center, disagreed.
“Before the law changed, it turned out that middle-income people donated a larger share of their income than the highest income people,” Gleckman said.
As a way to encourage people to give more, the Tax Policy Center is suggesting giving taxpayers a benefit only if they donate a certain percentage of their income.
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